CLOSING RENAULT TRADING CALL
Post emissions scandal investigations from the French government wiping 2.5bn EUR off its market cap we initiated a trading buy. By our calculations the worst case scenario was 350m dent to the mkt cap.
We saw this as an opportunity as the mkt was positioned bearishly on the sector and Dec numbers where fantastic.
Although fundamentally we still see upside in the name this was a trading call and so we are happy to close for a 8.29% profit.
Tuesday • 19 January 2016 • 17:08
Wiped 2.5bn EUR off its market cap post emissions investigations from the french Government. Even if they have to do a software upgrade for 700k cars its probably only 200EUR per car which equals 140m EUR or say a max of 500 EUR per car = 350m EUR.
Add to this how bearish autos everyone is now.
December numbers were blow out and numbers on February 12th will be good.
I would also buy Peugeot as we have previously mentioned due to blow out China numbers due in part to tax cuts feeding through and it is still cheap on an EV basis and they continue to build up a cash pile.
Buy RNO and UG…